EchoStar CORP Stock Compensation Disclosure
14.Stock-Based Compensation
Stock Incentive Plans
We maintain stock incentive plans to attract and retain officers, directors and key employees. Stock awards under these plans include both performance/market and non-performance based stock incentives. As of December 31, 2025, grant recipients had the ability to acquire from stock incentive plans 11.3 million shares of our Class A common stock and 320 thousand restricted stock units and awards. Stock options are granted with exercise prices equal to or greater than the market value of our Class A common stock at the date of grant and with a maximum term of approximately . We account for forfeitures as they are incurred. While we generally have issued stock awards subject to vesting, typically at the rate of 20% per year, certain stock awards have been granted with shorter vesting periods and/or immediate vesting and certain other stock awards vest only upon the achievement of certain company-specific subscriber, operational and/or financial goals. In addition, the Ergen 2020 Performance Award is subject to the achievement of specified stock price targets. As of December 31, 2025, we had 20.5 million shares of our Class A common stock available for future grant under the stock incentive plans.
Stock Award Activity
Our stock option activity was as follows:
For the Year Ended December 31, 2025 | ||||||||||
| Options | | Weighted- | | Aggregate Intrinsic Value | Weighted- | ||||
Total options outstanding, beginning of period | 13,559,033 | $ | 44.58 | |||||||
Granted | | 1,532,353 | $ | 72.37 | ||||||
Exercised | (2,908,405) | $ | 16.19 | |||||||
Forfeited and cancelled | (895,005) | $ | 39.22 | |||||||
Total options outstanding, end of period | 11,287,976 | $ | 56.09 | $ | 616,193 | 6.36 | ||||
Performance/market based options outstanding, end of period (1) | 4,207,130 | $ | 84.36 | |||||||
Exercisable, end of period | 2,410,706 | $ | 50.85 | $ | 139,456 | 4.74 | ||||
| (1) | These stock options are included in the caption “Total options outstanding, end of period.” See the 2022 Incentive Plan, Other employee performance awards and Ergen 2020 Performance Award below. |
We realized tax benefits from stock awards exercised as follows:
For the Years Ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
(In thousands) | |||||||||
Tax benefit from stock awards exercised | $ | 42,043 | $ | 2,150 | $ | 1,384 | |||
Our restricted stock unit and award activity was as follows:
For the Year Ended | |||||
December 31, 2025 | |||||
| Restricted Stock Units/Awards | | Weighted-Average Grant Date Fair Value | ||
Total restricted stock units/awards outstanding, beginning of period | | 91,228 | $ | 34.08 | |
Granted | 571,698 | $ | 29.30 | ||
Vested | (342,750) | $ | 24.98 | ||
Forfeited and cancelled | — | $ | — | ||
Total restricted stock units/awards outstanding, end of period | 320,176 | $ | 35.28 | ||
The following table summarizes additional information about our stock options and restricted stock units and awards:
For the Years Ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
(In thousands, except per share amounts) | |||||||||
Stock options: | |||||||||
Weighted-average grant date fair value of options granted | $ | 72.37 | $ | 14.43 | $ | 22.28 | |||
Intrinsic value of options exercised | $ | 140,552 | $ | 2,275 | $ | ||||
Restricted stock units and awards: | |||||||||
Weighted-average grant date fair value of units and awards granted | $ | 29.30 | $ | 16.60 | $ | 17.50 | |||
Fair value of units and rewards vested | $ | 33,444 | $ | 6,469 | $ | 9,926 | |||
Long-Term Performance-Based Plans
2022 Incentive Plan. On December 30, 2021, we adopted a performance-based incentive plan (the “2022 Incentive Plan”). The 2022 Incentive Plan provides stock options, which vest based on certain company-specific operational and/or financial performance conditions. Awards were initially granted under the 2022 Incentive Plan as of February 1, 2022. Exercise of the stock awards is contingent on achieving these conditions by December 31, 2026.
Although no awards vest until the Company attains the performance conditions described above, compensation related to the 2022 Incentive Plan will be recorded based on management’s assessment of the probability of meeting the performance conditions. If the performance conditions are probable of being achieved, we will begin recognizing the associated non-cash, stock-based compensation expense on our Consolidated Statements of Operations and Comprehensive Income (Loss) over the estimated period to achieve the performance condition.
During each of the years ended December 31, 2025, 2024 and 2023, we determined that 100% of the 2022 Incentive Plan performance conditions were probable of achievement. As a result, non-cash, stock-based compensation expense was recorded for the years ended December 31, 2025, 2024 and 2023 as indicated in the table below titled “Non-Cash, Stock-Based Compensation Expense Recognized.” For each of the years ended December 31, 2024 and 2023, approximately 33% and 17%, respectively, of the 2022 Incentive Plan awards had vested. For the year ended December 31, 2025, no additional 2022 Incentive Plan awards had vested.
Ergen 2020 Performance Award. On November 4, 2020, our Executive Compensation Committee of the Board of Directors approved an award to Charles W. Ergen, our Chairman, of long-term performance-based options (the “Ergen 2020 Performance Award”) to purchase up to 4,385,962 shares of EchoStar’s Class A common stock. The award is subject to the achievement of specified EchoStar Class A common stock price targets during the approximate period following the date of grant. The award was granted on November 6, 2020 and will expire on February 6, 2031.
Although no awards will vest until the market conditions are satisfied, as of December 31, 2020, we began recording non-cash, stock-based compensation expense for each vesting tranche based on the estimated achievement date of the specified stock price target. The valuation and probability of achievement for each tranche is determined using a Monte Carlo simulation. The same Monte Carlo simulation is used as the basis for determining the expected achievement date. As the probability of achievement is factored in as part of the Monte Carlo simulation, the expense for these tranches will be recognized concurrently over each tranche’s estimated achievement date even if some or all of the options never vest. If the related milestone for a tranche is achieved earlier than is expected, all unamortized expense for such tranche will be recognized immediately.
Non-cash, stock-based compensation expense was recorded for the years ended December 31, 2025, 2024 and 2023, as indicated in the table below titled “Non-Cash, Stock-Based Compensation Expense Recognized.” As of December 31, 2025, cumulatively approximately 20% of the Ergen 2020 Performance Award awards had vested. For the year ended December 31, 2025, no additional Ergen 2020 Performance Award awards had vested.
The non-cash, stock-based compensation expense associated with these awards was as follows:
For the Years Ended December 31, | |||||||||
Non-Cash, Stock-Based Compensation Expense Recognized (1) | | 2025 | | 2024 | | 2023 | |||
(In thousands) | |||||||||
2022 Incentive Plan | $ | 219 | $ | 1,149 | $ | 7,346 | |||
Ergen 2020 Performance Award | 7,638 | 10,816 | 12,308 | ||||||
Other employee performance awards | — | — | (1,441) | ||||||
Total non-cash, stock-based compensation expense recognized for performance based awards | $ | 7,857 | $ | 11,965 | $ | 18,213 | |||
| (1) | “Non-Cash, Stock-Based Compensation Expense Recognized” includes actual forfeitures. |
Estimated Remaining Non-Cash, Stock-Based Compensation Expense | | 2022 Incentive Plan | | Ergen 2020 Performance Award | ||
(In thousands) | ||||||
Expense estimated to be recognized during 2026 | $ | 236 | $ | 5,318 | ||
Estimated contingent expense subsequent to 2026 | — | 3,957 | ||||
Total estimated remaining expense over the term of the plan | $ | 236 | $ | 9,275 | ||
Given the competitive nature of our business, small variations in subscriber churn, gross new subscriber activation rates and certain other factors can significantly impact subscriber growth. Consequently, while it was determined that achievement of certain other company-specific subscriber, operational and/or financial performance conditions were not probable as of December 31, 2025, that assessment could change in the future.
Of the 11.3 million stock options outstanding under our stock incentive plans as of December 31, 2025, the following awards were outstanding pursuant to our performance based stock incentive plans:
As of December 31, 2025 | |||||
Performance Based Stock Options | | Number of | | Weighted- | |
2022 Incentive Plan | 124,799 | $ | 14.78 | ||
Other employee performance awards (1) | 573,561 | $ | 132.44 | ||
Ergen 2020 Performance Award | 3,508,770 | $ | 78.98 | ||
Total | 4,207,130 | $ | 84.36 | ||
| (1) | “Other employee performance awards” includes 182 thousand shares, majority of which will expire in 2029, and 392 thousand shares that will expire on January 1, 2027. |
Stock-Based Compensation
Total non-cash, stock-based compensation expense for all of our employees is shown in the following table for the years ended December 31, 2025, 2024 and 2023 and was allocated to the same expense categories as the base compensation for such employees:
For the Years Ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
(In thousands) | |||||||||
Cost of services | $ | — | $ | 1,376 | $ | 2,610 | |||
Selling, general and administrative | 36,272 | 35,007 | 48,904 | ||||||
Total non-cash, stock-based compensation | $ | 36,272 | $ | 36,383 | $ | 51,514 | |||
As of December 31, 2025, our total unrecognized compensation cost related to our non-performance based unvested stock awards was $78 million and will be recognized over a weighted-average period of approximately 2.6 years. Share-based compensation expense is recognized based on stock awards ultimately expected to vest.
Valuation
The fair value of each stock option granted (excluding the Ergen 2020 Performance Award) for the years ended December 31, 2025, 2024 and 2023 was estimated at the date of the grant using a Black-Scholes option valuation model with the following assumptions:
For the Years Ended December 31, | ||||||||||||||||||||||||
Stock Options | | 2025 | | 2024 | | 2023 |
| |||||||||||||||||
Risk-free interest rate | 3.62 | % | - | 4.46 | % | 3.58 | % | - | 4.49 | % | 3.58 | % | - | 4.61 | % | |||||||||
Volatility factor | 40.21 | % | - | 62.66 | % | 37.10 | % | - | 46.39 | % | 34.30 | % | - | 41.25 | % | |||||||||
Expected term of options in years | 3.9 | - | 6.7 | 3.3 | - | 6.7 | 4.1 | - | 6.6 | |||||||||||||||
Fair value of options granted (1) | $ | 10.54 | - | $ | 40.29 | $ | 5.15 | - | $ | 12.40 | $ | 7.40 | - | $ | 7.77 | |||||||||
| (1) | This change primarily resulted from the changes in the volatility factor and the price of our Class A common stock. |
While we currently do not intend to declare dividends on our Class A common stock, we may elect to do so from time to time. Accordingly, the dividend yield percentage used in the Black-Scholes option valuation model was set at zero for all periods. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded stock options which have no vesting restrictions and are fully transferable. Consequently, our estimate of fair value may differ from other valuation models. Further, the Black-Scholes option valuation model requires the input of highly subjective assumptions. Changes in these subjective input assumptions can materially affect the fair value estimate.
We will continue to evaluate the assumptions used to derive the estimated fair value of our stock options as new events or changes in circumstances become known.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 24, 2017 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.